How Apple Inc.'s Foreign Cash Hoard May One Day Come Home

Apple is among the largest holders of foreign cash, and current repatriation taxes ensure that it will likely stay there. That's partially why Congress is considering another repatriation tax holiday similar to a decade ago.

Jun 15, 2014 at 11:00AM

Apple (NASDAQ:AAPL) currently sits on over $132 billion in foreign cash. Fellow tech giants Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG)(NASDAQ:GOOGL) also have an awful lot parked abroad, but not as much. Microsoft has around $81 billion, while Google has $35 billion. That's almost a quarter of a trillion dollars between the three companies that won't be coming home anytime soon, with current repatriation tax rates of 35%.

Congress is considering another repatriation holiday, similar to the one in 2004. If another holiday is allowed, many companies could bring home some of those dollars. Apple and Microsoft have share repurchase programs that need to be funded with domestic cash, and share repurchases can help companies reduce their weighted average cost of capital, since the cost of equity is relatively high. Of course, lawmakers are more concerned with stimulating the U.S. economy through job creation and domestic investment.

Apple has been making headway on this front, though. The Mac maker recently built a large sapphire plant in Arizona with partner GT Advanced Technology, creating thousands of jobs. Apple also assembles its new Mac Pro at a facility in Austin, Texas. These are relatively small steps, but they're in the right direction. Congress grilled Tim Cook over Apple's tax practices last year, and Cook took the opportunity to push for broader tax reform.

In this segment of Tech Teardown, Erin Kennedy discusses tax repatriation with Evan Niu, CFA.

Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

Erin Kennedy and Evan Niu, CFA, own shares of Apple. The Motley Fool recommends Apple and Google (A and C shares) and owns shares of Apple, Google (A and C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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